Google and Verizon cross-license patents to ‘reduce the risk’ of future litigation

Google and Verizon today announced a long-term patent cross-license agreement. The duo said the deal covers “a broad range of products and technologies” but details were scarce beyond that.

Amusingly, the companies said the agreement will merely “reduce the risk of future patent litigation.” That leaves quite a large loophole open, we’d say.

“This cross license allows both companies to focus on delivering great products and services to consumers around the world,” Kirk Dailey, Head of Patent Transactions at Google, said in a statement. “We’re pleased to enter into this agreement with an industry leader like Verizon, and we welcome discussions with any company interested in a similar arrangement.”

Verizon General Counsel Randal Milch was even less direct, not even mentioning Google in his statement. Update: Milch has published a longer statement on Verizon’s blog. He emphasizes that the carrier is tired of fighting patent trolls:

The Constitution says that the patent system is supposed to “promote the Progress of Science and useful Arts.” But in high-tech industries like ours, the patent system can be exploited to get in the way of innovation. High-tech products can implicate thousands of patents, and when patent litigation takes years, costs millions of dollars, and comes long after innovators have launched new products, the Johnny-come-lately owner of a single patent can threaten an entire innovative ecosystem. That’s bad for innovation and bad for American consumers.

Verizon has long championed patent reforms and industry actions that promote innovation. We’re pleased that today’s licensing deal with Google will help reduce the supply of patents that so-called patent trolls can assert against us. We look forward to striking similar deals with other high-tech companies also concerned with the innovation tax that patent trolls often collect. But these deals can’t fix the system by themselves. More needs to be done. We continue to support Congress’s effort to enact meaningful patent litigation reform in the coming year.

The deal could also be a reaction to Google’s relatively new role as an Internet Service Provider (ISP) — the company may be interested in avoiding court battles over patents that could cause legal headaches related to Google Fiber. Verizon meanwhile may be looking to ensure its toes don’t get stepped on, including in the area of targeted advertising.

There has been a lot of speculation around offering lower subscription prices by having customers opt-in to getting ads while watching programming on TVs, PCs, tablets, smartphones, and other devices. This could naturally extend to Internet subscriptions as well, though at least for now Google seems perfectly happy with simply charging low fees.

Of the 34 cities that Google is considering expanding Google Fiber into, none are Verizon FiOS markets. Even if Google were to launch as an ISP in all 34 markets, it would challenge Comcast, AT&T, Time Warner Cable, and Cox Communications, but not Verizon.

Both companies have also shown interest in offering telemedicine and telehealth services. It’s possible the two have patents there that neither party wants to be slowed down by.

All in all, Google and Verizon each have large patent portfolios reaching a multitude of potential industries. The reason further details haven’t been given may simply bet that neither of them know exactly how they will benefit from the agreement in the near term (aside from fighting patent trolls), but they are well aware future-proofing can be worth the hassle.